The Largest Bank in Japan to Abandon a Blockchain Payment Network Project

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Key Takeaways:

  • Mitsubishi UFJ Financial Group (MUFG) has announced the termination of its blockchain payment network project.
  • The bank cited weak company development as the reason for abandoning the project. MUFG is one of the partner banks assisting the Bank of Japan perform digital currency experiments.

Mitsubishi UFJ Financial Group (MUFG) has announced the termination of its blockchain payment network project, citing weak company development as the reason.

MUFG, Japan’s largest bank, announced on Tuesday that it had already started steps to suspend the Global Open Network Japan (GO-NET Japan) blockchain payment network.

In 2019, MUFG and Akamai Technologies, a cloud service provider, based in the United States, launched GO-NET Japan as a subsidiary of GO-NET. The blockchain payment rail was expected to deliver one million transactions per second at the time, with an Internet of Things (IoT) integration in the works.

According to MUFG, the next stage will be to coordinate with all parties before disposing of GO-NET and its subsidiary network after three years.

The “slow increase of payment transaction volumes” caused by numerous issues, including the COVID-19 pandemic, was cited by MUFG as the rationale for abandoning its blockchain payment ambitions.

According to MUFG, GO-NET Japan could not create the requisite network effect to scale the business. As a result, the banking behemoth concluded that the project would not achieve tangible commercial success in a fair amount of time.

MUFG announced that it would continue to pursue other endeavours in the evolving finance landscape despite the impending GO-NET liquidation. For example, last year, the bank teamed with Coinbase to develop a cryptocurrency exchange in Japan.

MUFG is one of the partner banks assisting the Bank of Japan in performing digital currency experiments and its yen-pegged stablecoin ambitions.

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Shambhavi Soni